Published On: Wed, Feb 25th, 2015

Age Bakker (Cft): ‘Deficit of 2014 needs to be compensated; improvements in financial management are lagging’

Financial management on Sint Eustatius remains weak 

Age Bakker (2)ORANJESTAD - On February 20, the Board of financial supervision Bonaire, Sint Eustatius and Saba (Cft) met with the executive council and island council on Sint Eustatius. The Board expressed its concern about the fact that the 2014 fiscal year will likely end with a deficit. The Board also discussed the adequacy of procedures followed for hiring personnel in 2014, the importance of good financial management and on which insufficient progress has been made.

Execution of the budget for 2014

Even though the 2014 annual report is not yet ready, the most recent progress report for the last quarter of the past year shows that Sint Eustatius is heading towards a deficit up to USD 0,2 million. Throughout 2014 the public entity continuously felt the threat of a deficit. Even though a number of cost saving measures were introduced at the end of last year, Sint Eustatius unfortunately did not succeed in remaining within the budget framework. The government has been informed by the Board that the deficit that will result from the annual report will consequently have to be compensated in 2015. The executive council informed that it is aware of the need to compensate and will continue with the cost saving measures already introduced. These measures include a vacancy stop and holding on automatically prolonging certain contracts.

Financial management

The Cft discussed with the government the need to follow the correct procedure in case of staffing of personnel. Parties agreed on the premise that transparency around appointments is required and correct internal and external procedures must be followed at all times. To this end, and in consultation with the Kingdom Representative, a new action plan will be set up in which the reinforced procedures are reflected.

At the beginning of this year of evaluation, the Cft unfortunately had to ascertain that in 2014 no significant improvement with respect to several important points of financial management has been realized, points that were previously agreed upon. After significant steps forward in 2011, the process of improvement of the financial management seems stagnated. Neither the long awaited land policy, nor the maintenance plan for capital goods, nor the dividend policy or the norms and control framework, have been presented for ratification by the island council. Also in arrears is the new harbor ordinance. Finally, the Cft noted that the public entity often remains challenged to present reports in a complete and timely manner. The Cft and the executive council agreed to design an action plan in collaboration with the external accountant, to achieve the necessary improvements of the financial management as elaborated, in 2015. This action plan should function as guidance to realize the necessary improvements faster than has been the case up to now. The ultimate goal is to obtain an unqualified opinion from the external auditor on the financial statements of the public entity.

Click Tag(s) for Related Articles: